Patents & Inventions Law & Lawyers

A patent is a right granted for any device, substance, method or process which is new, inventive and useful.

A patent is legally enforceable and gives the owner the exclusive right to commercially exploit the invention for the life of the patent. This is not automatic-you must apply for a patent to obtain exclusive rights to exploit your invention.

There are two types of patents in Australia;

• a standard patent gives long-term protection and control over an invention for up to 20 years.
• an innovation patent is a relatively fast, inexpensive protection option, lasting a maximum of 8 years. The innovation patent replaced the petty patent on 24 May 2001.

Patents give effective protection if you have invented new technology that will lead to a product, composition or process with significant long-term commercial gain.

In return, patent applicants must share their know-how by providing a full description of how their invention works. This information becomes public and can provide the basis for further research by others.

Australian patents are administered by the Patent Office of IP Australia, a Federal Government Organisation.

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An outline of the patent system

Historical origins

Patents are the oldest form of intellectual property, but their historical origins are obscure. In England, in the fifteenth century, the monarch began to grant monopoly rights as a means of attracting new industries from continental Europe, but these were more in the nature of a royal licence to avoid the effects of guild regulations than a true grant of exclusive rights to carry on an activity.[4] It was only in the following century that patents began to be granted in respect of inventions, and the patent system was put on a statutory basis for the first time in the seventeenth century with the passage of the Statute of Monopolies 1623 (Statute of Monopolies). Despite its age, this English statute continues to have relevance to Australian patent law today.

As it first developed, the English patent was a slow, costly and cumbersome procedure for encouraging and protecting inventions. The procedure was described in derisory terms by Charles Dickens in a short story published in 1850, ‘A Poor Man’s Tale of a Patent’. Over the years there were many piecemeal reforms to the system, but it was the Patents Act 1883 (UK) that provided the basis of modern patent law.

Patent legislation in Australia has always been closely modelled on that of the United Kingdom. Prior to Federation, each of the Australian colonies had its own legislation based on the Patents Act 1883 (UK). In 1901, the Australian Constitution gave the newly established Commonwealth Parliament power to make laws with respect to ‘copyrights, patents of invention and designs, and trade marks’.In 1903, this power was exercised with the enactment of the Patents Act 1903 (Cth).

As in the United Kingdom, there have been many amendments to Australian patent legislation in response to formal commissions of inquiry. The 1903 Act was re-enacted with substantial changes in 1952 and again in 1990. The Patents Act 1990 (Cth) (Patents Act) provides the current legislative framework governing the grant and administration of patents in Australia.

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Functions of patents

Patent law has been described as a ‘stressful if fertile union’ between certain contradictory principles: self-interest and the common good; monopoly rights and liberty; the ownership of ideas and public disclosure of knowledge. This union results from the dual goals of patent law—to benefit society by encouraging the provision of new and useful goods, and to encourage and reward inventiveness.

These goals are achieved by providing incentives for innovation and knowledge sharing by granting monopoly rights, for a limited period, to exploit a new product or process. Monopoly rights encourage investment by providing an opportunity to recoup the financial outlays involved in developing an invention. They also reward the inventor by allowing a return to be made on the time and resources expended on research and development.

The limited duration of the monopoly means, however, that the patented invention eventually will be available for free and unrestricted use when the patent term expires: the compromise is thus ‘a way of securing future benefits for the common good’.In addition, patents promote knowledge sharing during the term of the patent by requiring the patent holder to place the details of the invention in the public domain. As one United States judge has stated:

The purpose of the patent system is not only to provide a financial incentive to create new knowledge and bring it to public benefit through new products; it also serves to add to the body of published scientific/technological knowledge. The requirement of disclosure of the details of patented inventions facilitates further knowledge and understanding of what was done by the patentee, and may lead to further technologic advance.

Exploitation of patents

A patent gives the inventor the right to stop others from exploiting the invention for a limited period. However, a patent does not grant an absolute right to exploit an invention in any way the inventor may choose. A patent holder may have to satisfy regulatory requirements in order to exploit the patented product or process; for example, a patented pharmaceutical compound may need approval under the Therapeutic Goods Act 1989 (Cth) before it can be marketed lawfully and sold as a treatment for a particular condition. Similarly, the use of a patented invention is subject to the general law; for example, the components required to manufacture a car may be the subject of many patents, but the car must still be used in accordance with motor traffic laws.

A patent holder is not obliged to exploit a patented invention, but the failure to do so may have implications for the patent holder’s rights. For example, the patent could be subjected to compulsory licensing, or it could be used or acquired by the Crown under relevant provisions of the Patents Act. A patent holder may authorise others to exploit the patent by granting a licence on agreed terms. This may be on an exclusive, sole or non-exclusive basis, and almost certainly will require the licensee to pay royalties or other fees to the patent holder.

It is important to note that while patents are a form of intellectual property, they do not confer ownership in the physical material described in the claims for a patented product or process. Thus, a patent over a genetic sequence does not amount to ownership of the sequence itself.

Criteria for patentability

Although there is considerable variance in detail from one jurisdiction to another, most countries apply similar tests for patentability: an invention must be novel (that is, new), must involve an inventive step, and must have a useful application. In addition, the description of an invention in a patent application must be sufficient to allow a person skilled in the relevant art to create the invention independently.

Briefly, the Patents Act provides that an invention will be patentable if it is a ‘manner of manufacture’ within the meaning of s 6 of the Statute of Monopolies; is novel; involves an inventive or innovative step; is useful; and has not been used secretly within Australia prior to filing the patent application.

Certain inventions are expressly excluded from patentability. Australia has relatively few express exclusions, but they include inventions involving ‘human beings, and the biological processes for their generation’, as well as inventions the use of which would be contrary to law. Other jurisdictions recognise a broader range of exceptions, including inventions involving diagnostic, therapeutic and surgical methods of treatment of humans and animals; and inventions whose commercial exploitation would be contrary to morality or public order.

Australian Patent Law

Australian patent law operates within an international legal framework, which shapes certain procedural and substantive aspects of the patent system.

Australia has enacted legislation that regulates patenting practices within the Australian ‘patent area’ with respect to inventions involving any type of technology. The procedures for obtaining a gene patent in Australia are, broadly speaking, the same as those that apply to patents claiming any other type of technology.

Patents Legislation

Section 51(xviii) of the Australian Constitution grants the Commonwealth Parliament power to make laws with respect to ‘copyrights, patents of inventions and designs, and trade marks’. Pursuant to this power, the Parliament has enacted the Patents Act 1990 (Cth) (Patents Act) and the Patents Regulations 1991 (Cth) (Patents Regulations).

Patent protection in most countries is available for inventions that are new, involve an inventive step, and have a useful application.

In Australia, the Patents Act provides that an invention is patentable if it:

• is a ‘manner of manufacture’—that is, the invention is appropriate subject matter for patent protection;
• is novel;
• involves an inventive or innovative step;
• is useful; and
• has not been used secretly within Australia before the priority date of the patent application.

Administration

The Australian patent system is administered by the Patent Office of IP Australia. IP Australia is a division of the Department of Industry, Tourism and Resources, but operates independently and reports directly to the Minister.

Under the Patents Act, the Commissioner of Patents has the power to grant a patent upon an application being filed with and examined by the Patent Office. IP Australia has developed the Patent Manual of Practice and Procedure (the Manual) to assist Australian patent examiners in applying the Patents Act and Patents Regulations.

State and federal courts and the Administrative Appeals Tribunal (AAT) also have a role in administering the patent system. Decisions of the Commissioner of Patents may be subject to review by the AAT or the Federal Court of Australia. The AAT may undertake merits review of the Commissioner’s decisions with respect to certain procedural matters prescribed by the Patents Act. A direct application may be made to the Federal Court for judicial review in relation to other decisions of the Commissioner; essentially those related to the grant of patents or matters closely allied to the grant (for example, amendments to patent specifications and revocations).

The Federal Court and state and territory Supreme Courts share original (first instance) jurisdiction over matters relating to the exploitation and enforcement of patent rights, including challenges to patent rights, infringement proceedings and compulsory licences. The AAT has no jurisdiction in relation to such issues.

Types of patents

Australian patent law recognises two principal types of patents:

(1) standard patents and

(2) innovation patents.

An applicant for a patent may elect to obtain protection for an invention under either system. Table A below outlines the key features of, and the difference in the scope of protection conferred by, standard and innovation patents.

Standard patents

A standard patent is the basic form of patent protection for inventions under Australian law and is consistent with the minimum requirements for patent protection under the Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS Agreement). Unless otherwise indicated, references to an Australian patent and discussions of patent rights in this Report relate only to the standard patent system.

Innovation patents

The innovation patent is a ‘second tier’ of protection, which was introduced in 2001 to replace the petty patent system.  Innovation patents are intended to provide protection for ‘lower level’ inventions for which standard patent protection is not available and which are not covered by the designs legislation.

Patents of addition

The Patents Act also provides for the grant of a ‘patent of addition’ for an improvement in, or modification to, an invention claimed in a standard patent that has already been granted.[21] A patent of addition may be obtained only by the owner of the earlier patent, or a person authorised by the owner. The term of a patent of addition expires at the same time as that of the patent on the main invention.

Table A - Features of standard patents and innovation patents

Features	Standard patent	Innovation patent
Term	20 years (s 67) Extension of up to 5 years   available for certain pharmaceutical patents (ss 70–79A)	8 years (s 68)
Number of claims	No   limit	Maximum of 5 claims   (s 40(2)(c))
Inventions excluded from   patentability, or excludable at the discretion of the Commissioner of Patents	Human beings and the biological   processes for their generation (s 18(2)) Inventions whose use would be   contrary to law (s 50(1)(a)) Inventions capable of application   as a food or medicine that are a mere admixture of known ingredients   (s 50(1)(b))	Same as for a standard patent, and Plants and animals and the   biological processes for the generation of plants and animals (s 18(3),   (4))
Level of invention required	‘Inventive step’ over the prior   art (s 7(2)–(3), sch 1)	‘Innovative step’ over the prior   art (s 7(4)–(6), sch 1)
Review by Patent Office prior to   grant	Substantive review for compliance   with the requirements for patentability (ss 44–49)	Formalities check only; no   substantive review unless requested (ss 52, 120(1A))

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Procedure for grant of a patent

Patent rights do not arise automatically. A patent can be obtained only by following the procedure set out in the Patents Act and Patents Regulations. An understanding of the procedure for obtaining a patent is important to understanding Australian patent law generally. The steps in obtaining an Australian patent are described below.

Filing an application

For a patent to be granted, an eligible person must file an application in the form prescribed by the Patent Office. Eligible persons are the inventor of the invention claimed in the application, or a person to whom the inventor has assigned his or her rights in the invention. A patent application must include a specification of the invention, which contains instructions adequate to enable a skilled person in the relevant area of technology to produce or perform the invention. The specification must also indicate the ‘claims’ that define the invention; that is, the scope of protection that the applicant is seeking.

Australian patent law recognises two types of patent applications—provisional and complete. Provisional and complete applications may be filed to obtain either a standard patent or an innovation patent.

A provisional application need only contain a description of the invention. Often, an inventor files a provisional application before all the details of an invention are known. The applicant then has 12 months to file a complete application.

A complete application must contain a full description of the invention, together with claims, and an abstract summarising the invention being disclosed. A complete application may be based on one or more provisional applications, and only those claims that are ‘fairly based’ on the relevant provisional application will be entitled to the priority date of the provisional application.

The ‘priority date’ of a patent claim is important in determining whether the requirements for patentability of an invention have been met. The requirements of novelty and inventive step are assessed against the prior art as it existed before the priority date. The priority date is typically the date on which a provisional application is filed in Australia, or the date on which an application is filed in another participating jurisdiction.

An applicant may also elect to file a complete application with the Patent Office under the Patent Cooperation Treaty (PCT). A PCT application designates all the jurisdictions that are parties to the PCT (including Australia), and secures an international priority date.

PCT applications that have entered the national phase (and will be processed as a complete application) are the main type of applications received by IP Australia. In 2002–03, 16,278 PCT applications selected Australia as one of the jurisdictions in which an applicant wished to obtain patent protection and entered the national phase in Australia. During the same period, 5,694 non-PCT applications for standard patents were filed with IP Australia.

Divisional applications

Each patent application may claim protection only for a single invention. If, following assessment of a patent application, a patent examiner finds that an applicant has claimed more than one invention in the application, the applicant may elect to file a ‘divisional application’—that is, a new application divided from the original or parent application. A divisional application allows an applicant to continue to benefit from the priority date of the original application.

Divisional applications may claim subject matter not contained in the original application so long as all the features of at least one of the claims were disclosed in the original application. There are no statutory limits on the number of divisional applications that may arise from a single complete application.

The Patents Act restricts the subject matter that may be claimed in a divisional application, depending on the time at which it is filed. However, a divisional application, once filed, is subject to the same procedural requirements, including examination, as any other complete patent application.

In its submissions to the Inquiry, IP Australia indicated that divisional applications are currently ‘open to abuse’. In practice, such abuse may occur only in a small number of cases. However, IP Australia suggested that patent applicants are able to make strategic use of divisional applications in order to delay determinations by the Patent Office as to the proper scope of patent claims, or as to whether a patent should be granted. IP Australia commented that the Patents Act allows an applicant to use a divisional application to obtain a de facto monopoly by extending the period within which to respond to an examiner’s adverse report. While this use of divisional applications may be legitimate in some circumstances, IP Australia suggested that it might be used tactically by an applicant in ‘newly developing areas of technology, such as genetics, where there is a question of [the] patentability of the subject matter’. Further, an applicant might avoid a decision in an opposition proceeding by withdrawing the opposed application and refiling it as a divisional application. To address these issues, IP Australia suggested that limitations could be imposed on the circumstances in which divisional applications are available.

However, the majority of submissions and consultations on this issue did not support imposing additional limitations either on the period within which a divisional application may be filed or on the subject matter that may be claimed in a divisional application. Submissions and consultations questioned whether divisional applications are being misused, and commented on the lack of evidence that divisional applications claiming genetic inventions present a special case.

Examination

Once an application has been filed with the Patent Office, a number of additional steps must be followed before a patent may be issued. An applicant must file a request that the Patent Office examine the application. Examination is not automatic and a request for examination must generally be filed within five years of the date of filing a complete specification. However, IP Australia’s standard practice is to direct applicants to file a request for examination, if no request has been received, at approximately 32 months from the priority date, although this period may vary according to IP Australia’s workload. An abbreviated examination may be requested if an Australian patent application is related to a patent that has already been granted by the patent office in a prescribed foreign jurisdiction.

The purpose of examination is to determine whether the invention meets the statutory requirements for patentability set out in the Patents Act. The Patent Office carries out searches of previously published documents—including scientific and patent literature (‘prior art information’)—to determine the prior art material relevant to the claimed invention. In addition, an applicant must disclose to the Patent Office the results of searches carried out by or on behalf of foreign patent offices in respect of the invention claimed in an Australian application, or in a corresponding patent application filed overseas. An examiner with expertise in the relevant area of technology then examines the application, taking into account the information contained in the results of these searches and any other prior art information.

Examination of a patent application typically involves an exchange between the examiner and the applicant about the appropriate scope of the specification and the claims in light of the relevant prior art. This process is known as ‘prosecution’ of a patent application.

Following receipt of a request for examination, an examiner will make an initial assessment of an application for a standard patent and either accept the application as filed or issue a ‘first report’ detailing the procedural and substantive grounds for objecting to the application. An applicant then has a period of 21 months to address the objections raised by the examiner. The examiner may issue further reports for each response by the applicant that does not satisfy the objections raised. An application for a standard patent will generally lapse if it is not in order for acceptance within 21 months after the date of the first report.

Acceptance, publication and sealing

The Commissioner of Patents must notify an applicant of the decision to accept or refuse a patent application, and must publish notice of the decision in the Official Journal of Patents (Official Journal). Formal refusal of an application is rare. More commonly, applications for standard patents lapse for failure to obtain acceptance within the prescribed 21 month period following a first report. The Official Journal also publishes notices of lapsed applications.
Publication of a notice of acceptance in the Official Journal should be distinguished from the publication of a complete specification for a standard patent. This typically occurs 18 months after the earliest priority date for the application, and is also advertised in the Official Journal. An application is confidential prior to publication of the complete specification, and only bibliographic details—such as the applicant’s name and title of the invention—are made available by the Patent Office.

A patent is granted when the Commissioner of Patents causes the patent to be sealed with the seal of the Patent Office. For a standard patent, this will occur within six months of the date of publication in the Official Journal of the notice of acceptance of the application, unless the application is opposed.

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International legal instruments

Australia is a party to a number of international legal instruments relating to intellectual property. The major international instruments that affect patent laws and practices in Australia are:

• Paris Convention for the Protection of Industrial Property 1883 (Paris Convention);
• Patent Cooperation Treaty 1970 (PCT);
• Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure 1977 (Budapest Treaty); and
• Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS Agreement).

Australian domestic law has given effect to significant provisions of each of these instruments.

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